Graphite purchases Sovereign's City & County

Alice Murray
06 December 2013

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Graphite Capital has acquired home care provider City & County Healthcare Group from Sovereign Capital.

It was revealed in September that Sovereign was seeking to exit the company, and hired Panmure Gordon to handle the sales process. The business was put on the block for £120m.

The investment comes from Graphite's recently closed fund - Graphite Capital Partners VIII - which has now reached its hardcap of £500m.

Graphite will support the company's growth via acquisitive and organic strategies, as well as through the development of specialist care services with the NHS and local authorities.

Previous investment
Sovereign acquired City & County in 2009 and has developed the business through acquisitions. The buy and build firm has supported 15 bolt-on purchases of domiciliary care companies. Under Sovereign's stewardship, the company has increased the number of care hours it provides each week from 34,000 to 140,000 and grown the number of branches it operates from 12 to 64.

Debt
Debt for the deal was provided by Investec, which supplied a combination of senior secured term loans, a senior secured revolving credit facility and a senior secured acquisition facility.

Lloyds Bank Commerical Banking also supported the deal; its acquisition finance team acted as joint mandated lead arranger in providing a senior debt package.

Company
City & County provides home care assistance, mainly for the elderly. Furthermore, it provides specialist care for young people and adults with learning disabilities, mental health needs and brain injuries.

The company's EBITDA for 2012 was reported at £14m on revenues of more than £100m. It operates through 64 branches across the UK and cares for more than 15,000 people each year, mainly on behalf of the NHS and local authorities, as well as private clients.

People
Craig Rushton is CEO of City & County. Mark Hall, partner, led the deal for Graphite. Dominic Dalli led the deal for Sovereign.

Advisers
Equity - SJ Berwin (Legal); Rothschild (Corporate finance); Alverez & Marsal (Financial due diligence); PwC (Commercal due diligence); Westminster Advisers (Policy due diligence); Gallagher Heath (Insurance due diligence); Intuitus (IT due diligence).
Vendor - KPMG (Corporate finance); Reed Smith (Legal); LEK (Commercial due diligence).